Motorists will find the cost of fuel rising by a few cents a time twice a year under measures that have passed parliament's lower house.
The federal government accelerated its revival of indexation of the fuel excise on Tuesday, bringing draft laws to parliament and pushing them through the House of Representatives a few hours later.
It came after Labor agreed to support the $3.6 billion revenue-raising measure.
Motorists pumping 50 litres of fuel into their vehicle will pay an extra 40 cents.
"The impact on households has been modest, but the impact on the budget is significant," Treasurer Joe Hockey told the parliament.
A special fund will be set up to put $1 billion towards repairing regional roads.
The opposition said the fund was the key reason why it changed its mind on what it once labelled Tony Abbott's bowser bandit tax.
Shadow treasurer Chris Bowen acknowledged the about-face, but said the opposition had no choice because the revenue raised so far would probably go back to big oil companies.
Opposition Leader Bill Shorten earlier said the compromise offer was a difficult decision for Labor.
"In a beauty parade, between giving money to oil companies and putting money back into Australian roads, generating jobs and confidence, it is clear which way Labor has to go," he said.
Mr Hockey was reluctant to play politics, saying he was not going to gloat over the win.
But he acknowledged how the abandonment of fuel indexation under the Howard government in 2001 led to an "extraordinary" loss of revenue.
The laws will now ensure tariff proposals enacted last year for regular rises will be permanent.
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